The London-listed company seeks to “keep the Ebitda margin
at the current level of mid-fifties,” Aral said in a phone
interview from Almaty, citing actions including cost cuts. Kcell
targets “low- to mid-single digit” revenue growth this year,
helped by an expansion in the data business, he said.

TeliaSonera raised $525 million by selling 25 percent of
Kcell shares in London last month. Kcell said today that net
income fell 7.5 percent to 61.8 billion tenge ($410 million)
last year. Sales rose 1.8 percent to 182 billion tenge. Expenses
fell 2.2 percent last year, mostly because of a decline in the
cost of handsets, the company said.

Kcell shares have risen 19 percent since their initial
public offering price of $10.50, boosting the company’s market
value to $2.5 billion. The stock rose 1 percent today to $12.57
after Kcell reported full-year earnings and confirmed a special
divided. The company said it will distribute 32.4 billion tenge,
or all its second-half net income, to investors.

Market Share

Kcell had 47.7 percent of the Kazakh market by users as of
the end of September, according to Credit Suisse Group AG.
Billionaire Mikhail Fridman’s VimpelCom Ltd (VIP) had 37 percent of
the market, compared with Tele2’s 12 percent and Altel’s 3.4
percent. The company’s market share “stabilized,” while Tele2
is growing in Kazakhstan at the expense of VimpelCom Ltd and
local operator Altel, Aral said.

“Licenses for third-generation networks were awarded only
in 2011, and smartphone penetration in Kazakhstan is just 12
percent,” Aral said. “The emergence of cheap Chinese
smartphones may boost it.”

Kcell and its Kazakh competitors agreed in November to
reduce mutual-traffic transmission rates by 15 percent a year
through 2015 to comply with government regulations. This was a
slower pace of MTR reduction than the market expected, according
to Aral.